Friday, October 30, 2009

What Google Maps Navigation Means

Earlier this week, Google dropped a major bombshell on the tech world by announcing Google Maps Navigation. It gives mobile phones with Google Maps the ability to get free, voice-guided, turn-by-turn GPS directions. And it looks damn good.

Initially, it will only be on Android 2.0 devices like the Motorola Droid, but Google has promised that it will eventually be available on Blackberries, iPhones, and Windows Mobile devices.

This announcement is unbelievably huge for a number of reasons. The only other navigation options people have are very expensive. Either a stand alone GPS from Garmin, TomTom, etc. or an expensive iPhone application. Google Navigation is free. And it provides a superior experience to stand alone GPS units. You can search by voice using plain English, view your route on a map or satellite image, and even view streetview pictures of upcoming turns. Check out all the cool features here. On top of all this, using Google Navigation provides constantly up-to-date information. No more worrying about roads and points of interest being outdated.

As you can see, I'm excited about this. But this isn't just big news because of how cool it is. It's big because of what it means for the industry. Immediately following the announcement, stock prices of both Garmin and TomTom took a nosedive and are still falling.

With one free software announcement, Google seriously shook up an industry it previously wasn't involved in. The navigation industry is one where companies are used to charging very large sums of money for their products. Now that business model is being challenged. By this time next year, nearly every single smartphone in the US will have a free and very good GPS unit built in. Demand for standard GPS units is going to drop off very quickly. You can see why Garmin and TomTom are scared.

Let's look at what this means for the GPS/mapping industry. Why hasn't Google done a navigation product before? After all, they've had their mapping service up and running since 2004. The reason is simple: they weren't allowed to. In the beginning, Google was licensensing their map data from other companies, including NAVTEQ and TeleAtlas. Part of their agreement with these mapping companies was that they wouldn't use the data for a GPS navigation product. Up until recently, if you visited a Google Maps page, you would see Copyright NAVTEQ or Copyright TeleAtlas at the bottom. But if you visit now, you see this:

Mapping the world is not an easy task. So how did Google manage to create their own map data? Simple: remember a certain fleet of camera-equipped cars that have been roaming the world for a few years? Turns out they were doing more than just taking pictures while they were out there. What about the live traffic information? That was previously supplied by NAVTEQ as well. But remember that announcement a few months ago that Google was going to start using live data from users cellphones to generate traffic delays? 

It's all coming together, isn't it?

So what does this mean, long term? The grim truth, is that I think the days of standalone GPS units are numbered. That's not to say that NAVTEQ, Garmin, TomTom, etc. are going to go out of buisness, but their bottom line is going to be severely impacted. Their business is going to rapidly shrink and will probably be confined to very specific markets, such as fleet vehicles. But for the vast majority of average consumers, Google Navigation will be the prefered choice both because it's already with them and because it will likely provide a superior experience for them.

It's going to be an interesting future for existing navigation and mapping of which I happen to work for. One thing is for sure: Google is becoming an increasingly powerful force in an increasing number of industries. But competition is a good thing, so I'm very curious to see how this all pans out. :-)

Google Maps Navigation